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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127237  
Subject: Hitting a wall Date: 12/20/2012 9:20 AM
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I'd like to buy something smaller before I sell my house but I have hit a bit of a wall on getting a mortgage for the new property - plenty of assets but not enough verifiable income(self-employed for 8 years, spouse survivor pension, rent, dividends). I'm 58 so a bit reluctant to start any sort of draw from my retirement assets.

I will need to sell my primary house by the end of May for maximum tax benefits (as of today, anyway). My goal is to have it on the market March 1 or before. It should be one of the least expensive houses in a desirable neighborhood and I think it will sell fairly quickly. After the end of May, I will have much less incentive to get it sold.

The sale is due to too much space, not finances.

Any other thoughts on how to qualify for a mortgage and buy now ?
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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 124487 of 127237
Subject: Re: Hitting a wall Date: 12/20/2012 12:17 PM
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Hi RAD,

Any other thoughts on how to qualify for a mortgage and buy now ?
Insufficient info. Why are you thinking you don't currently qualify? What analysis has been done so far, and by whom?

Dave Donhoff
Leverage Planner

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 124488 of 127237
Subject: Re: Hitting a wall Date: 12/20/2012 12:31 PM
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Look at asset depletion loans.

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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 124490 of 127237
Subject: Re: Hitting a wall Date: 12/21/2012 12:32 PM
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Mortgage broker said so

His analysis - all the regular stuff - income, debt, assets

I'm not desperate to do this but I didn't think it would be particularly difficult. If I sell before I buy, I am getting less and less likely to replace that residence. It is currently my primary location but I have another.

I am seriously ticked that I started the conversation with "my financial situation is complicated" and credit scores were the first things checked. Live and learn - next time, credit scores can be the last thing checked.

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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 124491 of 127237
Subject: Re: Hitting a wall Date: 12/21/2012 1:16 PM
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Hi rad,

I am seriously ticked that I started the conversation with "my financial situation is complicated" and credit scores were the first things checked. Live and learn - next time, credit scores can be the last thing checked.

Well, don't be ticked about that (of all things to be ticked about.) all mortgage credit inquiries incurred in a rolling 45-day period are treated for scoring purposes as a single inquiry, so its not like you have anything to be concerned about in regards to any borderline qualifying issues.

There are portfolio programs available (unique niche products... not surprising for many brokers and virtually all retail reps to be unaware of them) that will give you qualifying credit for income calculated as a percentage of your assets *without* requiring asset depletion. This sounds like what you are going to be best served by. You can specifically ask around for that, or if you want me to help you just ping me on that.

Luck,
Dave Donhoff
Leverage Planner

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Author: crackdclaw Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 124492 of 127237
Subject: Re: Hitting a wall Date: 12/21/2012 1:35 PM
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There are portfolio programs available (unique niche products... not surprising for many brokers and virtually all retail reps to be unaware of them

Tis the holiday season, why the slam on retail lenders? Quickly polled 3 of my colleagues here at a Fortune 50 bank, they and myself are alware of these programs and know of brokers that offer the product, so that we can refer a client we can't assist. If I was to paint with a brush as broad as yours, I would now say 100% of retail lenders are aware of these programs.

There are unique benefits that banks are able to offer borrowers that brokers are not not, and vice versa. As a retail lender I still stay well networked and tuned in to what my buddies in the correspondent and broker world are doing.

Peace on Earth, Goodwill to Men.

Happy Holidays Dave.

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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 124493 of 127237
Subject: Re: Hitting a wall Date: 12/21/2012 1:59 PM
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Hi Crackd,

Tis the holiday season, why the slam on retail lenders?
No slam, note the "virtual" qualifier? I was just providing the volleyball setup so you could slam it down over the net by showing your own unique competence as a retail guy, buddy!

I would now say 100% of retail lenders are aware of these programs.
Don't diminish yourself like that, I can guarantee that's the opposite of reality.

There are unique benefits that banks are able to offer borrowers that brokers are not not, and vice versa
Doubtlessly! I am funding 4 of my clients cases through retailers right now, and am mid-process on funding one of my rentals at a retailer. "Every task has its own best tool."

Merry Christmas, Hannukah (belated,) Kwanzaa & Festivus to you & yours!

Dave Donhoff
Leverage Planner

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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 124494 of 127237
Subject: Re: Hitting a wall Date: 12/21/2012 2:05 PM
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Specialty programs are going to cost. Probably a lot. Basically, these days lenders look upon any borrower who is unusual as toxic.

Your best bet is undoubtedly to manage to fit in a standard FannieMae niche.

You haven't said how big your retirement account is, so maybe you can't do this, but lots of retired people do.

Set up an automatic monthly withdrawal from an IRA. FNMA will then consider that as if it were a paycheck, as long as the account has enough assets to keep it up for 3 years. After the loan closes, you can then stop the withdrawal plan. If you are old enough you can stop it immediately. If you are too young, IIRC the IRS says you have to continue it for 5 years.

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Author: wasmick Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 124495 of 127237
Subject: Re: Hitting a wall Date: 12/21/2012 5:28 PM
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I am seriously ticked that I started the conversation with "my financial situation is complicated" and credit scores were the first things checked. Live and learn - next time, credit scores can be the last thing checked.

You have every right to be.

You knew your situation was unique, you knew it would take some thought and creativity and instead you got an order taker who couldn't wait to pull credit because "that's what we do".

Sorry it happened but you're operating in an industry where the barrier to entry is not high so the idiot quotient is and where very, very few are the kind of professional you needed.

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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 124496 of 127237
Subject: Re: Hitting a wall Date: 12/21/2012 5:30 PM
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Set up an automatic monthly withdrawal from an IRA.

That one came up with my financial advisor but I'm 58 and plan to keep working as much as I am now so I really don't want to do it.

Thanks for the thought, though.

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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 124497 of 127237
Subject: Re: Hitting a wall Date: 12/21/2012 5:44 PM
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If it doesn't happen, it's very likely to be more than 45 days.

I'm going to give myself a few days off and then think about it.

Thanks

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Author: CCinOC Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 124498 of 127237
Subject: Re: Hitting a wall Date: 12/22/2012 12:26 PM
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From a [non-copyrighted] mortgage industry newsletter:

"I bought a really cool shovel. It was ground breaking." What isn't so clever is the "borrower brutalization," as one veteran called it, that we see. He wrote, "I've been through two purchase transactions in the last twelve months, both with an extremely competent originator. She did a great job specifically of guiding me through the paper trail process, and explaining the SAR [suspicious activity report] issues she faces. It was really crazy. I, like many others, believe that the fear of making a mistake at all levels of the credit process is really crippling to the industry and to the housing recovery. Whoever is making the rules is far away from the actual process and I am certain that well qualified borrowers are not able to participate in the intended QE3 stimulus of low mortgage rates. Someone should get the Keynesian stimulus guys at the Fed together with those in Congress who are pushing for more documentation. They appear at cross purposes." [...]

And now, briefly, back to the broker and banker discussion. "I have seen a lot of back and forth between bankers and brokers in your blogs. Among other things, I assist the scenario help desk for our company, so I work with our salespeople on both brokered and banked loans. One thing I can honestly say is that the service level provided to the client is entirely based on the individual salesperson and is not contingent on the company they work for, outside of whether they have received the proper training at some point in their career. I think the SAFE Act [Secure and Fair Enforcement for Mortgage Licensing Act] has ensured that all salespeople, brokered or banked, now receive an adequate base of training in order to get licensed, which wasn't the case before. Those who are trained beyond this base (or seek it out themselves) are usually the top salespeople. I'd bet that most who read your blog (or any industry blog) probably value knowledge enough to seek out professional education when needed. It turns out that knowing your salesperson, or having a reference to someone who is trustworthy is probably the best way to go as a consumer.

Regardless of who employs the originator, as the commentary pointed out a week or two ago, education is key. I received this note from Justin L. out in California. "The reason why I am e-mailing you is because I agree 100% about how 'A successful LO [loan originator] is educating their clients on what to expect with today's current situation in the lending industry.' I created a binder with pictures, examples, explanations, definitions, and bullet points on how a loan works, what is the secondary mortgage market, and what to expect while going through the loan process about four months ago. (I am new to this industry having only been licensed in NMLS [Nationwide Mortgage Licensing System] for six months.) The reason I agree with this position is simple. I accept the responsibility that I think is inherent to this profession and I refuse to hide behind the old mantra, 'Well, the consumer should have known what they were getting themselves into.' My responsibility to my clients is to educate, the end result is they secure a loan to buy a part of the American Dream. (I feel a better educated borrower is a more responsible borrower.) If I did my job, then my client and their family will have a home that not only they can call their own, but they will be able to afford their monthly mortgage payment and stop living paycheck to paycheck.

And, "I especially liked the comments on setting expectations with borrowers and realtors in today lending environment. Unfortunately borrowers and most Realtors don't remember anything you tell them at the beginning of the transaction and are STILL surprised when you become their proctologist. I always follow up my conversation with an email reiterating the conversation and freely forward it back to them later in the transaction as a 'friendly' reminder."

***

To the OP, your LO should have had you sign a "Borrower's Authorization" before s/he pulled your credit report. I don't pull one without it. Let's see, do I invest the time to analyze the scenario, inquire with lenders, discuss with the borrower, etc. before I determine if he has crap credit, or after? Hmmm...I can't decide.

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